The Pensions Ombudsman has reacted to recent claims by a judge that it is not a "competent court" and can't enforce its determinations.
The comments related to the case of Burgess v BIC UK Ltd and concerned the overpayment of benefits. During the case, Mr Justice Arnold suggested a determination made by the Pensions Ombudsman "was not an order of a ‘competent court’, because the Pensions Ombudsman is not a court".
The Judge said, however, that "an order of the county court enforcing any determination of the Pensions Ombudsman, or any direction made by the Pensions Ombudsman in a determination, pursuant to section 151(5) of the Pension Schemes Act 1993 would be an order of a ‘competent court’."
According to the Pensions Ombudsman, trustees of an occupational scheme are entitled to recover any overpayments of benefits made in error by offsetting against future benefit payments. This is known as the "equitable self-help remedy of recoupment".
For trustees, the judge's remarks suggest that any direction made by the Pensions Ombudsman allowing them to recover overpaid benefits by using the equitable self-help remedy must first be ‘recognised’ via an order from the county court.
But in a response in its latest factsheet the Pensions Ombudsman noted: "We regard Mr Justice Arnold’s comments as obiter.
"That is, he was not required to decide whether the Pensions Ombudsman is a ‘competent court’ for the purposes of section 91(6) of the PA 1995 in view of his conclusion on the facts of the case before him. He merely gave a provisional view on the matter, which did not form part of his judgment on the issues before him.
"The court did not have the benefit of hearing full legal arguments on the issue, including from the Pensions Ombudsman himself, who was not a party in the appeal."
Steve Webb, director of policy at Royal London, said: "It would be highly unsatisfactory if trustees had to go to the county court to get judgments by the Pensions Ombudsman enforced.
"The ombudsman process is already lengthy and once a decision is reached it is important that it can then be implemented.
"If there is any legal uncertainty following the judge’s comments then this needs to be removed as a matter of urgency."